Things You Probably Don’t Know about Bankruptcy in B.C.
Part 1
Laws and procedures revolving around bankruptcy are generally the same everywhere in Canada, but some details change depending on where you live and your individual circumstances. This is why everyone considering bankruptcy always must consult a professional financial advisor before proceeding. Some details about bankruptcy even change depending on where you are within British Columbia and Bankruptcy Trustees interpret areas of the Bankruptcy and Insolvency Act differently which can have a significant difference to the terms of a Bankruptcy.
Always consider ALL your options before filing for bankruptcy. One preferable option may be to file a consumer proposal. Topics explaining consumer proposals may be found on this website.
- Speaking with a Bankruptcy Trustee
Only a Bankruptcy Trustee can administer any filing under the Bankruptcy and Insolvency Act. So at some point this step is mandatory for anyone thinking about declaring bankruptcy, no matter where they are. This is a crucial decision, and you might not understand everything that bankruptcy entails, even if you think you have a good understanding of the process. It’s also possible that you don’t have to declare bankruptcy at all. Any bankruptcy trustee will make sure you understand your options. They should also make sure that you know how intrusive and arduous bankruptcy proceedings can be, and that Bankruptcy should only be used as a last resort and most will review other options with you. Based on the different interpretations the Bankruptcy Trustees have It would be prudent also to get advice from a professional debt consultant who solely represents your interests and not the creditors.
- Your Loans, Debts, and Payments
Despite rumours to the contrary, not all of your debts and loans are cleared when you declare bankruptcy. Even after declaring bankruptcy, you continue to keep making payments to certain creditors. Debts that a bankruptcy cannot clear include student loans where it is less than 7 years since you left school, alimony and child support payments, debts that arose from fraud or other criminal activities, and some government overpayments.
- Exempt and Non-exempt Assets
Everyone seems to be familiar with the part of bankruptcy where your assets are liquidated and the proceeds paid to your creditors. We’ve all seen that movie scene where the distraught homeowners watch helplessly as their furniture and other wordly goods are unceremoniously carried out the front door. These dramatic scenes aren’t entirely true to life. Whether or not your assets are liquidated greatly depends on the type of asset, its value and where exactly you live in the province. Assets that you may be permitted to keep could include cars, houses and household goods below a certain equity value..
These are some of the dry, unemotional facts that go along with bankruptcy. Don’t let the emotional or social stigma of bankruptcy or other kinds of debt elimination scare you away from getting the right information. Bankruptcy should however be seen as the very last resort. It is very often better to file a consumer proposal, the alternative to bankruptcy
Please do not hesitate to call me at 778 340 4002 or visit my Burnaby Debt Help Page
Gurinder Dhaliwal, 4 Pillars Burnaby
gurinderd@4pillars.ca
